In our current system, citizens don't have hard earned assets. They have tons of debt. So they won't care. And those who do have hard earned assets in the form of cash will likely keep converting them to dollars. The only ones who will be SEVERELY hurt by this are the lenders holding the debts of the citizens, since fiat losing value against bitcoins and eventually inflating like crazy means citizen's debt is shrinking into nothing. Citizens will support this, wealthy asset holders who know what they are doing will support it, and banks who lend money to citizens will get screwed, if not wiped out.



1) There can still be banks. Loans will just have to be short-term, and for things that are actually worth something, as opposed to for anything at all just to beat inflation. Less garbage for sale, more durable high-quality products, and less impact on environment from resource use and garbage. 2) Just In Time production is already almost a gospel in our economy. Inventory depreciates way faster than money inflates already, so it won't be that much of a difference if that inflation changes to deflation. 3) Once deflation is stable, preorders, or sale prices, can be set to account for that deflation. Also, if you preorder, aka invest, in someone doing something for you now with inflationary money, the money they receive will keep losing value, and they will be working for less and less as time goes on. If you invest in someone using a deflationary currency, such as giving 20BTC to OpenTransaction developers, as time goes on, that 20BTC ($2,000 at the time) will keep going up in value, giving them more and more to work with if they only use small amounts of it at a time.


Deflation is a shrinking amount of currency, or the economy expanding faster than the money supply (depending on whom you ask). Euro is not shrinking in supply, and Greece's economy is not expanding at all, from what I know. So your problem is that Greece took on too many loans, became way too risky, and now no one wants to lend anyone any more. The problem is entirely from debt and it's risk, not from any money supply issues (deflation).


That's what thoughtfan was saying. Taking money from savings to pay for government's debt mistakes doesn't help anyone, especially not the savers.



Actually, it was inflationary currency and easy credit that enabled those things.
You were asking for anyone to say it, so I will: Deflation is good, inflation is bad:

In an inflationary economy, it is cheaper to borrow than to save. It's better to buy something now with a loan, and pay the loan off over time, since even though you are maying more in numbers, you are paying less in actual value. A $600 a month mortgage on a new house now will feel like a $250 a month mortgage 30 years from now. As a result, we now have an economy where 3/4th of people who reach age of 65 have less than $100,000 in their savings and retirement (making them dependent on government), average credit card debt is around $15,000 per person, almost no one has a positive net worth (they owe more than they have), and governments are to the point where most of their tax income is going to pay off debt instead of to pay for infrastructure and actual government services. I would even propose that much of the enormous economic growth over the last 50 years is fake, sustained by borrowiing that will have to be repaid later, and if it can't be, will result in the economies of the governments with massive borrowing dropping right back down to where they would be if no one ever borrowed (i.e. to the level of the country's net worth).
On the other hand, in a deflationary economy, people are incentivised to save and become self-sufficient, instead of relying on government. People would likely be more picky in what they spend their money on, and won't be buying as much. Yes, that will slow our economy considerably compared to what it is in our inflationary system, but as I mentioned above, our current booming inflationary economy many not be "real" to begin with, and may be a giant cycle of global-sized boom and bust. We're just now getting to the bust. In a deflationary economy, there will be booms and busts as well, but more frequent, and much more shallow. Plus less coonsumerism will be much better for the environment. Oh, and don't forget that poor people don't have access to the stock market. Cash is their only means of saving and "investing" for the future. Right now, our inflationary system is robbing their wealth, and giving it to the banks that "print" the new money. A deflationary system will actually allow many poor people to save, invest, and get themselves out of poverty.